The Gazprom’s Management Committee considered information on the measures for increasing the operational safety of the Company’s gas transmission system.

The Management Committee tasked the relevant structural units and subsidiaries with developing and submitting for consideration in the second quarter of 2010 a draft version of the Program for comprehensive overhauling of the linear part of Gazprom’s gas trunklines for the period from 2011 to 2015 and a draft version of the Comprehensive Program for the reconstruction and technical re-equipment of gas transportation facilities and UGS compressor stations for the period from 2011 to 2015.

The measures for increasing the operational safety of Gazprom’s gas transmission system will be submitted for consideration of Gazprom’s Board of Directors.

Background:

Among the top priority areas of Gazprom’s activities are ensuring reliable gas supply to the consumers in Russia and abroad, as well as failsafe operation of the gas transmission system.

Gazprom’s gas transmission system is comprised of some 160 thousand kilometers of gas trunklines and branch pipelines, 280 compressor stations, over 4 thousand gas pumping units and 25 underground gas storage facilities.

Owing to the centralized management, branched structure and parallel transportation routes, the gas transmission system has a significant margin of safety and it is capable of ensuring reliable gas supplies even during the peak consumption periods. However, a significant number of gas transmission facilities were constructed in the 70s and 80s of the last century. Therefore, Gazprom is taking a series of efforts aimed at increasing the operational safety of the gas transmission system.

For the purpose of decreasing the accident risk and eliminating blackouts at gas transmission facilities, the Company is actively working to establish a system to control the technical condition and integrity of the linear part of gas trunklines.

Timely diagnostics, overhauls and re-isolation of the linear part of gas trunklines in 2003 through to 2008 resulted in a 30 per cent drop in the breakdown rate. The number of pipeline sections operated below the planned pressure level reduced three-fold. The length of overhauled pipelines increased from 1356 km in 2003 to 2756 km in 2008. In addition, Gazprom annually accomplishes 16 to 18 scheduled maintenance packages at the gas transmission system facilities.

Reconstruction of the gas transmission system carried out from 2003 to 2008 increased the system capacity by 5.3 billion cubic meters.

Currently, the Comprehensive Program for the reconstruction and technical re-equipment of gas transportation facilities and UGS compressor stations for the period from 2007 to 2010 is underway. The Program provides for the modernization and replacement of over 500 gas pumping units, reconstruction of some 5 thousand kilometers of gas pipelines and some 300 gas distribution stations. This will increase the gas transmission system throughput by 32 billion cubic meters and reduce transportation losses by 3.5 billion cubic meters of gas per year.